Capitaline

Results 05-May-22

Analysis

Garware Technical Fibres

Sales up 6%, NP up 1%

Garware Technical Fibres consolidated net sales increased 6.23% to Rs 356.31 crore in Q4FY22 compared to Q4Fy21. Sales of Synthetic Cordage segment has gone up 10.12% to Rs 310.37 crore (accounting for 85.57% of total sales). Sales of Fiber and Industrial Products & Projects segment has gone down 14.66% to Rs 52.35 crore (accounting for 14.43% of total sales). Inter-segment sales came down from Rs 7.77 crore to Rs 6.41 crore.

Operating profit margin has declined from 21.15% to 20.59%, leading to 3.41% rise in operating profit to Rs 73.37 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 27.71% to 23.26%. Purchase of finished goods cost fell from 3.36% to 2.36%. Employee cost decreased from 11.42% to 10.60%. Other expenses rose from 34.82% to 41.84%.

Other income fell 15.29% to Rs 4.82 crore. PBIDT rose 2.02% to Rs 78.19 crore. PBDT rose 3.45% to Rs 76.72 crore. Provision for depreciation rose 0.19% to Rs 5.36 crore.

Profit before interest, tax and other unallocable items (PBIT) have jumped 4.15% to Rs 77.43 crore. PBIT of Synthetic Cordage segment rose 10.81% to Rs 71.21 crore (accounting for 91.96% of total PBIT). PBIT of Fiber and Industrial Products & Projects segment fell 38.29% to Rs 6.23 crore (accounting for 8.04% of total PBIT).

PBIT margin of Synthetic Cordage segment rose from 22.80% to 22.94%. PBIT margin of Fiber and Industrial Products & Projects segment fell from 16.45% to 11.89%. Overall PBIT margin fell from 21.66% to 21.35%.

Profit before tax grew 3.71% to Rs 71.36 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 17.47 crore, compared to Rs 15.59 crore. Effective tax rate was 24.48% compared to 22.66%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 1.26% to Rs 53.89 crore.

Equity capital stood at Rs 20.62 crore as of 31 March 2022 to Rs 20.62 crore as of 31 March 2021. Per share face Value remained same at Rs 10.00.

Promoters’ stake was 52.62% as of 31 March 2022 compared to 52.62% as of 31 March 2021.

Full year results analysis

Net sales of Garware Technical Fibres have increased 14.97% to Rs 1189.4 crore. Sales of Synthetic Cordage segment has gone up 17.29% to Rs 1,030.32 crore (accounting for 84.83% of total sales). Sales of Fiber and Industrial Products & Projects segment has gone up 5.77% to Rs 184.20 crore (accounting for 15.17% of total sales). Inter-segment sales rose Rs 18.04 crore to Rs 25.12 crore.

Operating profit margin has declined from 19.75% to 18.74%, leading to 9.07% rise in operating profit to Rs 222.90 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 24.83% to 28.53%. Purchase of finished goods cost fell from 2.98% to 2.58%. Employee cost decreased from 14.93% to 12.29%. Other expenses rose from 37.28% to 38.32%.

Other income fell 26.33% to Rs 25.54 crore. PBIDT rose 3.93% to Rs 248.44 crore. Provision for interest rose 2.42% to Rs 10.57 crore. Loan funds declined from Rs 101.81 crore as of 31 March 2021 to Rs 79.57 crore as of 31 March 2022. Inventories rose to Rs 223.93 crore as of 31 March 2022 from Rs 190.42 crore as of 31 March 2021. Sundry debtors were higher at Rs 257.94 crore as of 31 March 2022 compared to Rs 241.78 crore as of 31 March 2021. Cash and bank balance declined from Rs 57.40 crore as of 31 March 2021 to Rs 40.47 crore as of 31 March 2022. Investments rose to Rs 520.76 crore as of 31 March 2022 from Rs 466.93 crore as of 31 March 2021 .

PBDT rose 4% to Rs 237.87 crore. Provision for depreciation rose 3.92% to Rs 21.46 crore. Fixed assets declined from Rs 242.36 crore as of 31 March 2021 to Rs 235.82 crore as of 31 March 2022. Intangible assets declined from Rs 4.76 crore to Rs 4.20 crore.

Profit before interest, tax and other unallocable items (PBIT) has jumped 9.72% to Rs 235.69 crore. PBIT of Synthetic Cordage segment rose 13.02% to Rs 213.56 crore (accounting for 90.61% of total PBIT). PBIT of Fiber and Industrial Products & Projects segment fell 14.40% to Rs 22.13 crore (accounting for 9.39% of total PBIT).

PBIT margin of Synthetic Cordage segment fell from 21.51% to 20.73%. PBIT margin of Fiber and Industrial Products & Projects segment fell from 14.84% to 12.01%. Overall PBIT margin fell from 20.41% to 19.41%.

Profit before tax grew 4.01% to Rs 216.41 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 51.63 crore, compared to Rs 49.67 crore. Effective tax rate was 23.86% compared to 23.87%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 4.03% to Rs 164.78 crore.

Equity capital stood at Rs 20.62 crore as of 31 March 2022 to Rs 20.62 crore as of 31 March 2021. Per share face Value remained same at Rs 10.00.

Promoters’ stake was 52.62% as of 31 March 2022 compared to 52.62% as of 31 March 2021 .

Cash flow from operating activities decreased to Rs 63.85 crore for year ended March 2022 from Rs 228.07 crore for year ended March 2021. Cash flow used in acquiring fixed assets during the year ended March 2022 stood at Rs 14.71 crore, compared to Rs 23.55 crore during the year ended March 2021.

Management Comments:

In a statement, Mr. Vayu Garware, CMD, Garware Technical Fibres Ltd. said, "During Q4F22, Operating EBITDA margin at 20.6% has improved by 2.7% compared to YTD Dec-21 despite very high inflationary headwinds which we have been able to pass on to the maximum extent with a little lag. Stellar performance of International business continues at a double digit growth with strong performance in Aquaculture cages and Sports sectors in Q4. Both categories grew in strong double digits with all parts of the International business performed well despite the issues of global supply chain disruption - containers availability and high ocean freight cost. Cash conversion cycle which was taking longer in H1 and Q3FY22 due to global supply chain disruption has improved a little in later part of Q4. However, we still have lot of international deliveries in transit to our subsidiary in Chile against orders which are eliminated for sales and profit in the consolidated financial statements. In the challenging environment in FY22 with high inflationary headwinds and global supply chain disruption, we have delivered about 9% growth in Operating EBITDA with the strength of our products and solutions with high value propositions and strong brands. Whereas PAT growth has been lower at 4% due to lower other income which was impacted by mark to market valuation of treasury investments. "

The Board of Directors has recommended a Dividend of Rs 7.00/- (70%) per share of Rs. 10/- each for approval by the Members of the Company at ensuing Annual General Meeting.

The stock trades at Rs 3005

Garware Technical Fibres : Consolidated Results
Particulars	2203 (03)	2103 (03)	Var.(%)	2203 (12)	2103 (12)	Var.(%)
Net Sales	356.31	335.42	6	1,189.40	1034.57	15
OPM (%)	20.6	21.2		18.7	19.8
OP	73.37	70.95	3	222.9	204.37	9
Other Inc.	4.82	5.69	-15	25.54	34.67	-26
PBIDT	78.19	76.64	2	248.44	239.04	4
Interest	1.47	2.48	-41	10.57	10.32	2
PBDT	76.72	74.16	3	237.87	228.72	4
Depreciation	5.36	5.35	0	21.46	20.65	4
PBT	71.36	68.81	4	216.41	208.07	4
Taxation	17.47	15.59	12	51.63	49.67	4
PAT	53.89	53.22	1	164.78	158.40	4
Minority Interest (MI)	0.00	0.00		0	0
Net profit	53.89	53.22	1	164.78	158.40	4
EPS (Rs)*	#	#		79.9	76.8
Notes
* EPS is on current equity of Rs 20.62 crore, Face value of Rs 10, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
Figures in Rs crore
Source: Capitaline Corporate Database

Garware Technical Fibres : Consolidated Segment Results
	% of (Total)	2203 (03)	2103 (03)	Var.(%)	% of (Total)	2203 (12)	2103 (12)	Var.(%)
Sales
Synthetic Cordage	86	310.37	281.85	10	85	1,030.32	878.46	17
Fiber and Industrial Products & Projects	14	52.35	61.34	-15	15	184.2	174.15	6
Total Reported Sales	100	362.72	343.19	6	100	1,214.52	1,052.61	15
Less: Inter segment revenues		6.41	7.77	-18		25.12	18.04	39
Net Sales		356.31	335.42	6		1,189.40	1,034.57	15
PBIT
Synthetic Cordage	92	71.21	64.26	11	91	213.56	188.95	13
Fiber and Industrial Products & Projects	8	6.23	10.09	-38	9	22.13	25.85	-14
Total PBIT	100	77.43	74.35	4	100	235.69	214.8	10
Less : Interest		1.47	2.48	-41		10.57	10.32	2
Add: Other un-allcoable		-4.6	-3.06	-51		-8.7	3.59	PL
PBT		71.36	68.81	4		216.41	208.07	4

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